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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SC NO: 69 of 1996
CANISIUS KARINGU
AND:
PAPUA NEW GUINEA LAW SOCIETY
WAIGANI: KANDAKASI J
2001: 14th June
10th September
9th November
PRACTICE & PROCEDURE - Court order required to entitle a party to costs – Unless otherwise ordered an order for costs means "party and party costs"- Taxing officer has no power to vary a costs order – If in doubt as to what costs have been awarded taxing officer needs to refer it to the Court for determination – Taxing officer is to be guided by whether the costs were necessarily and reasonably incurred for the attainment of justice unless otherwise ordered.
COSTS - Litigant in person’s Costs – Entitlement to such costs – includes both legal costs and disbursement necessarily and reasonably incurred for the attainment of justice -–Within Courts discretion whether or not to order costs and at what rate.
LAWYERS COSTS - A person qualified, admitted as a lawyer and issued with a current practicing certificate entitled to render accounts or bill for legal fees – Current practicing Certificate not required if conducting own case and is no bar to recovering legal costs and disbursement necessarily and reasonably incurred for the attainment of justice provided there is no dual again.
WORDS & PHRASES - "Lawyer and client costs" – fees payable by a client to his lawyer – "Party and party costs" – Fees recoverable by a successful party against another – "Costs" – All legal costs and disbursements necessarily and reasonably incurred for the attainment of justice – Costs for litigant in person includes both legal costs and disbursement necessarily and reasonably incurred for the attainment of justice provided there is no dual gain.
PNG Cases Cited
Concord Pacific Limited & Anor v. Paiso Company Ltd & Ors N1981
Clive Wissman v. Collector of Customs [1977] PNGLR 324
Odata Limited v. Ambusa Copra Oil Mill Limited & National Provident Fund Board of Trustees (unreported o6/07/01) N3006
Kimlee Equipment &Spare Pty Ltd v. Santa (PNG) Pty Ltd (unreported judgement of Doherty J) N1312.
Kimlee Equipment &Spare Pty Ltd v. Santa (PNG) Pty Ltd (unreported judgement of Doherty J) N1312.
Kramer Consultants Pty Ltd & Cameron McNamara Pty Ltd Trading as Cameron McNamara Kramer & Associates v. The State [1985] PNGLR 200.
Inakambi Singorom v. John Kalaut [1985] PNGLR 238
PLAR No.1 of 1980 [1980] PNGLR 326.
Norah Mairi v. Alkan Tololo & Ors [1976] PNGLR 125
Ombudsman Commission Investigations of Public Prosecutor [1978] PNGLR 345
Mellor [1974] PNGLR 312,
Kincaid [1974] PNGLR 219,
Godwin Haumu (unreported 06/04/01) N2094.
Karingu [1988-89] PNGLR 276 per Bredmeyer J & Amet, J
Other Cases Cited
Buckland v Watts [1970] 1 QB 2.
Society v Chorley [1884] UKLawRpKQB 115; (1884) 13 QBD 872
Hart v Aga Khan Foundation (UK) [1984] 1 All ER 239
Hart v Aga Khan Foundation (UK) [1984] 2 All ER 439
Ogier v Norton [1904] VicLawRp 13; (1904) 29 VLR 536
Scottish Benefit Society v Chorley [1884] UKLawRpKQB 115; (1884) 13 QBD 872 at 877
Penington –v- Russel (1883) 4N.S.W. L.R. (Eq) 4
Counsel:
Canisius Karingu, In person.
K. Kua, for the Respondent
9th November 2001
KANDAKASI J: The appellant ("Mr. Karingu") is seeking a review of a decision of the Deputy Registrar of the Supreme Court in her capacity as taxing officer ("the Registrar"). The Registrar allowed only his out-of-pocket expenses and not his legal costs because he was not acting through a lawyer.
Mr. Karingu contends that, the Registrar was wrong in her decision because the Supreme Court ordered all of his costs. The Supreme Court ordered "Costs of the Appeal is awarded to the Appellant". The Registrar was therefore wrong in effect in varying the Supreme Court orders to cover disbursements only and that was outside her powers.
He also argues that, in so doing, the Registrar acted contrary to her own ruling that, she would tax the appellant’s bill of costs in accordance with O.22 r.8 of the National Court Rules ("Rules"). That rule reads:
"Order of payment (52/8)"
Subject to this Order, a party to the proceedings in the Court shall not be entitled to recover any costs of or incidental to the proceedings from any other party to the proceedings except under an Order of the Court".
The argument is that, since the Supreme Court made an order covering all of his costs, the Registrar acted outside her powers to allow only out of pocket expenses. It was therefore contrary to O.22 r.8.
The Respondent ("the Law Society") argues that the Registrar did not err in her decision. It argues that, since Mr. Karingu was not a lawyer issued with a certificate to practice law in the country under the Lawyers Act 1986, ("Lawyers Act"), he could not get his full costs of his successful court action. He was only entitled to recover his reasonable out of pocket expenses.
This presents a number of legal questions for determination. They are as follows:
The relevant facts are these. Mr. Karingu is an admitted lawyer. Under O.S. 162 of 1996, Mr. Karingu as a plaintiff, applied for a review of a decision of the Council of the Papua New Guinea Law Society not to issue him with an unrestricted practicing certificate. The National Court dismissed that application on the basis that, he did not proceed by way of a judicial review. He appealed against that decision and was upheld by the Supreme Court.
Mr. Karingu acted in person all the way to the Supreme Court using his skills and knowledge as a trained and otherwise qualified lawyer but without a current practicing certificate. Following his successful appeal, the Supreme Court ordered costs in his favour. Based on that, he applied for a taxation of his costs. When his application went before the Registrar, most of his costs were disallowed except only for his out-of-pocket expenses. Application was then made to the Supreme Court for a review of the Registrar’s decision but the Chief Justice directed that the review application be heard by the National Court at the first instance. The matter came before me and was argued on the 14th June 2001.
The general rule regarding costs is that, costs follow the event. In other words, a successful plaintiff or defendant is entitled to recover his costs from the losing party. Whether or not costs should be ordered is a matter entirely within the discretion of the Court, which must be exercised in accordance with judicial principles. This is clearly expressed in O. 22 rr. 4, 5, and 11 of the Rules. For case authorities on this, see for example Concord Pacific Limited & Anor v. Paiso Company Ltd & Ors N1981 and Clive Wissman v. Collector of Customs [1977] PNGLR 324 at page 325(although in the context of the District Courts Act, s. 236).
Of course, there are at least two kinds of often-talked about costs a court can order at the end of a case. The first is "lawyer and client costs". This kind of costs comprises of the proper remuneration payable to a lawyer by his client for legal work performed by the lawyer for his client. It includes disbursements necessarily and reasonably incurred by the lawyer on behalf of his client in the course of his employment. In most cases, this type of costs is referred to as "solicitor client costs". Order 22 rr. 34 and 35 of the Rules govern this type of costs.
The second type of often-talked about costs is "party and party costs". This type of costs is the opposite of "solicitor client costs" and is governed by O.22 rr. 23 and 24 of the Rules. It comprises of the proper costs, charges and expenses reasonably and necessarily incurred by one party to a litigation to enable him to successfully, either complete or in part or in whole the prosecution of a claim or the defence of a claim. This is the kind of costs usually ordered against a losing party. The amount of costs that can be recovered under this type of costs order is usually less than the amount that can be recovered under a "solicitor and client costs". Most authorities suggest the amount recoverable under this type of costs order is about two thirds (2/3) of the costs incurred on a solicitor client basis. This expression is apparent in the context of an application for security for costs. I mentioned that in Odata Limited v. Ambusa Copra Oil Mill Limited & National Provident Fund Board of Trustees (unreported o6/07/01) N2106 at page 24.
Expect in special cases where the court is minded to make an order for costs of a different type, all order for costs are invariably expressed in terms of, "judgement for the plaintiff with costs" or "the plaintiff shall pay the defendants costs to be agreed if not taxed" or words to that effect. In other words, if costs are to be paid on a scale other than "party and party costs", the court would usually specify that in the order. Hence, unless an order for costs specifies to the contrary, all orders for costs are on a "party and party costs" basis.
In this case, the Supreme Court simply ordered "Costs of the Appeal is awarded to the Appellant". That meant that, Mr. Karingu’s costs were to be paid on a "party and party costs" basis.
When such an order for costs is made and the parties are not able to agree on the costs payable, it has to be taxed by the taxing master or the taxing officer. In our jurisdiction that is a function that is performed by the Registrar, his Deputies and Assistant Registrars. The taxing officer is empowered to exercise powers under Order 22 having regard to the kind of costs ordered by the Court. Rule 39 of that Order vests the taxing officer with some general powers in addition to the specific powers he or she is vested with under the Rules for the particular type of costs ordered. In any case, the taxing officer must have regard to the matters set out in O.22, r 36 when exercising his or her discretionary powers.
In this case, since the order was on a "party and party costs" basis, the provisions of Rule 24 applies. That provision reads:
"24. Party and party basis. (52/23)"
(1) Costs shall be taxed on a party and party basis unless the costs are to be taxed on the common fund basis under Rule 32 or on the trustee basis under Rule 33.
(2) On a taxation on a party and party basis, there shall be allowed all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed."
(Underlining added)
The words used by this provision especially sub-rule (2) are very clear as to what the taxing officer should do and the kind of costs the taxing officer should allow. The taxing officer is required to allow "all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed." This means that, all that the taxing officer should do when taxing a bill of costs is to decide, whether each item of costs claimed were necessarily and properly incurred for the attainment of justice for enforcing or defending the rights of the party whose costs are being taxed. There is no grant of power either in this rule or else where for the taxing officer to vary an order for costs.
In this case, the Registrar decided to tax the applicant’s costs in accordance with Rule 8. In so doing she decided not to adopt the practice adopted in Australia and England as represented in a number of cases relied on by the applicant, which have been again cited before me. The Registrar was of the view that, she was being asked to determine the rate at which the applicant’s costs should be taxed. This is apparent from her written ruling which reads in relevant parts as follows:
"I decline to say what rate I should apply, expect as specified in Order 22 Rule 8 of the National Court Rules which allows a party costs of or incidental to the proceedings and out of pocket expenses.
I decline on the basis that (sic) do not wish to assume the function of the Court proper or a Judge in saying what the rate should be where in our jurisdiction here our rules and law are presently silent.
It is my view that this should be left to the Court to decide or state and develop at a later stage as there is clearly a need for this to be done as our rules and law as it is now do not allow any specific rates for litigant in person or more so litigants who have specialised skills like in this present case a litigant with the special skills of a lawyer appearing in person."
The Registrar then proceeded to tax Mr. Karingu’s bill of costs and at the end of that, she issued a certificate of taxation. The certificate of taxation is dated 31st August 1999 and it reads as follows:
"IN PURSUANCE of the Order in this suit bearing date 30th day of October, 1997, I was on the 24th day of August, 1999 attended by the Appellant and the lawyer for the Respondent and notice of taxation having been duly given, I certify that I have disallowed the legal costs of the Appellant and taxed his out of pocket expenses at the under mention sum.
The Appellant at the sum of K574.10."
In my view, the Registrar correctly noted that a party could be entitled to a taxation of his or her costs provided the Court has made an order for costs in terms of O. 22 r. 8. I also find that she was right on the question of the rate to tax a bill of costs. That is particularly so where costs are ordered on a "solicitor and client basis" and for costs in which the taxing officer is to use his or her discretion to determine whether or not to allow any item of costs either wholly or in part. I am not aware of any published guidelines on the rate of costs other than those under Table 1 of Schedule 2 in the Rules. Nevertheless, I am aware that the taxing officers have been using figures of between K100.00 and K150.00 per hour on "party and party costs" taxation and a lawyer’s hourly charge out rate to his client where costs have been ordered on a "solicitor and client costs" basis.
Whilst I accept that there is a need for some formal guidance as to the amount of costs that can be allowed, I do not accept that there is no guidance has to how the discretion vested in the taxing officer can be exercised. Where a bill of costs requires the exercise of the taxing officers discretion in accordance with the provisions of Order 22, there are number of local case authorities in addition to the matters set out in O.22, r.36. These authorities say that, just like any other discretionary powers vested in statutory or public bodies, this discretion must be exercised rightly or properly and not arbitrarily or capriciously. In much the same way, a court can not interfere with the exercise of a discretionary power by a statutory body which shows it reached a decision in the exercise of its discretion after considering all the relevant factors, the taxing officers decision can not be interfered with: see for example, Kimlee Equipment &Spare Pty Ltd v. Santa (PNG) Pty Ltd (unreported judgement of Doherty J) N1312. In the case cited, the National Court on review of a taxed costs found that the taxing officer did not err in allowing disbursements although high on the basis that, the Sheriff, whose bill it was, had no choice but to incur them to properly and correctly discharged his duties.
Based on the prevailing practice and the case authorities as well has Table 1 of Schedule 2 of the Rules, I am of the view that the law and practice is clear and not necessarily silent as was determined by the Registrar. What is however not clear is the costs recoverable by unrepresented successful parties. That was precisely the issue before the Registrar. In her written reasons for decision, she ruled that she would proceed to tax Mr. Karingu’s costs under O.22, r.8. In so doing she failed to note that, that rule requires orders for costs to be made before any party to any litigation can claim costs and failing agreement, taxation. She failed to note that the order for costs in this case, in the absence of any evidence and suggestion to the contrary, was an order for Mr. Karingu’s costs to be assessed on a "party and party costs" basis which was in effect a meeting of the requirement under O.22, r. 8. As a result, she failed to take into account the applying provision of O.22, r.24 and proceed to tax the costs on that basis. That resulted in her decision that the Supreme Court order for costs meant disbursements only to the exclusion of Mr. Karingu’s professional legal costs. She took the term "costs" to mean disbursements only. For reasons I will shortly give, I consider that was in effect a variation of the court order, which I find was not within her powers. When the issue arose she should have adjourned the taxation and refered the matter back to the court to rule on it.
The term "costs" is not defined in the Rules but the Lawyers Act 1986, does. It is defined to mean and include fees, charges, disbursements, expenses and remuneration. Most law dictionaries such as A Dictionary of Law by L.B. Curzon and Dictionary of Law by Peter Collins, define it in terms of expenses involved in or relating to a court action, which can be awarded by a Judge to a party (usually the wining party) to an action. The learned authors in Odgers Principle of Pleading and Practice 21st edition define the term in these words at page 360:
"Last comes the important question of "Costs". The word is sometimes used to denote the remuneration, which a party pays his own solicitor. But it also means that sum of money, which the court or the judge orders one litigant to pay another to compensate the latter for expenses, which he has incurred in the litigation. The amount so awarded seldom, if ever repays the outlay which the successful litigant has been compelled to make..."
The only local case authority dealing with the meaning of the term "costs" is Kramer Consultants Pty Ltd & Cameron McNamara Pty Ltd Trading as Cameron McNamara Kramer & Associates v. The State [1985] PNGLR 200 ("the Kramer Consultants Case"). That was a case in which the very issue before the Registrar in the present case was resolved on a referral from the taxing officer there.
The relevant facts in that case were straightforward. The plaintiff became the winner of an arbitration award and were ordered costs in their favour. The order for cost read "the defendant shall pay the plaintiff costs of the arbitration reference". The plaintiff filed a bill of costs in accordance with the Rules following that order. When the bill of costs went before the taxing officer, the taxing officer was first faced with the question of whether the plaintiff’s costs should include both its legal costs and disbursements or out of pocket expenses or only one of them. The issue arose because the plaintiff conducted the proceedings without the assistance of a lawyer.
His Honour Cory J (as he then was) rule that the words "costs of (arbitration) reference" meant professional legal costs only and nothing else apart from disbursements. In the case before it, the court also held that, because the plaintiff conducted its proceedings without a lawyer, they were not entitled to costs of preparations for and conduct of the arbitration except for their out-of-pocket disbursements. His Honour reasoned that there was nothing in the Arbitration Act or the Rules defining the term "costs". Then by virtue of Schedule 2.2 of the Constitution, His honour referred to and adopted the principles of common law and equity on point as set out in a number of cases.
His honour first referred to the case of Buckland v Watts [1970] 1 QB 2. In that case, a successful appellant in person was awarded his costs of his action. However, on appeal it was held that a litigant in person other than a solicitor was not entitled to claim costs for time spent in preparing his case but only his out-of-pocket expenses. That case considered and applied the law as laid down by Bowen LJ in London Scottish Benefit Society v Chorley [1884] UKLawRpKQB 115; (1884) 13 QBD 872, a decision of the Court of Appeal. At page 876 his Lordship said:
"His meaning seems to be that only legal costs which the court can measure are to be allowed, and that such legal costs are to be treated as expenses necessarily arising from the litigation and necessarily caused by the course which it takes. Professional skill and labour are recognised and can be measured by the law: private expenditure of labour and trouble by a layman cannot be measured."
Sir Gordon Willmer in Buckland v Watts (supra) at page 37 said:
"What a successful party who has got an order for ‘costs’ is entitled to recover falls, as is well known, under two headings. One heading covers his disbursements; that is to say, money which he has actually had to pay out to other people such as witnesses, counsel, professional advisers and so forth. The other heading is described as ‘costs’. This is intended to cover remuneration for the exercise of professional legal skill. This, I think, is in accordance with the views expressed by Bowen LJ in the judgement, which my Lord has already read. It is because there has been an exercise of professional legal skills that a solicitor conducting his own case successfully is treated differently from any other successful litigant in person conducting his own case. We are not concerned with the exercise of other professional skills. Other professional people, who become involved in litigation and conduct their own cases, may recover something in respect of their own professional skill in so far as they qualify as witnesses and are called as such ... but I can find no ground either in principle or on authority for allowing him (the appellant) anything by way of remuneration for the exercise of a professional skill which he has not got."
Cory J then traced the development of the law including the passage of the Litigants in Persons (Costs and Expenses) Act 1975 (Imp) in England and cases decided thereafter such as that of Hart v Aga Khan Foundation (UK) [1984] 1 All ER 239, per Lloyd J at page 242 which was affirmed on appeal to the Court of Appeal in Hart v Aga Khan Foundation (UK) [1984] 2 All ER 439 and Ogier v Norton [1904] VicLawRp 13; (1904) 29 VLR 536, per Madden CJ at page 538 with whom A’Beckett J agreed, a decision of the Full Court. These authorities continue to recognise and apply the law as enunciated in the earlier cases for the reason given by Bowen LJ in London Scottish Benefit Society v Chorley [1884] UKLawRpKQB 115; (1884) 13 QBD 872 at 877. In that case a lawyer litigant in person was allowed to recover his legal costs because in conducting his own litigation he was exercising his professional legal skills.
His honour also considered schedule 1.9 of the Arbitration Act and section 36 of the then Lawyers Act Chp. 91. These provisions respectively read:
"The costs of the reference and award are in the discretion of the arbitrators or umpire who may direct to and by whom, and in what manner, the costs or any part of the costs are to be paid, and may tax or settle the amount of costs to be paid or any part of the costs and may award costs to be paid as between solicitor and client".
"No costs, fee, reward or disbursement on account of, or in relation to, an act or proceeding done or taken by a person who acts as a lawyer without being duly qualified so to act, or in contravention of section 10(2) are recoverable in an action, suit or manner by any person."
His honour was of the view that section 36 of the then Lawyers Act provided the basis to confine the term "costs" to professional legal costs. Effectively, his honour was of the view that these provisions did not allow for a departure from the principles of common law and equity as set out in the cases his honour cited. The judgement in my view did not in anyway depart from the meaning given to the word "costs" by law dictionaries and other authorities as noted above.
Then at page 539 he referred to the case of Penington –v- Russel (1883) 4N.S.W. L.R. (Eq) 4, where it was said:
"......We think, then, the decision given by the Court in New South Wales, which considers all the English authorities, points directly to the same conclusion. It definitely states that a solicitor who appears in court, and who is qualified whether practising or not, is entitled to have his profit costs in his own litigation if he appears for himself. That case brings to a distinct definition the proposition, which had not been so distinctly defined by the English authorities and it also applies the same principles which was supposed to be stated by English cases...".
(Underlining added)
Since the judgement in Kramer Consultants case (supra), there has been some marked change to the rules of practice in England, in keeping with present thinking and desires. This is reflected in the comprehensive Civil Procedure Rules 1998 based on the Lord Woolf recommendations, particularly in Rule 48.6, which reads:
"Litigants in person
48.6 (1) This rule applies where the court orders (whether by summary assessment or detailed assessment) that the costs of a litigant in person are to be paid by any other person.
(2) The costs allowed under this rule must not exceed, except in the case of a disbursement, two-thirds of the amount which would have been allowed if the litigant in person had been represented by a legal representative.
(3) Costs allowed to the litigant in person shall be –
- (a) such costs which would have been allowed if the work had been done or the disbursements made by a legal representative on the litigant in person’s behalf;
- (b) the payments reasonably made by him for legal services relating to the conduct of the proceedings; and
- (c) the costs of obtaining expert assistance in connection with assessing the claim for costs.
(4) Subject to paragraph (2), the amount of costs to be allowed to the litigant in person for any item of work to which the costs relate shall, if he fails to prove financial loss, be an amount in respect of the time spent reasonably doing the work at the rate specified in the costs practice direction.
(5) A litigant who is allowed costs for attending at court to conduct his case is not entitled to a witness allowance in respect of such attendance in addition to those costs.
(6) For the purposes of this rule, a litigant in person includes –
- (a) a company or other corporation which is acting without a legal representative; and
- (b) a barrister, solicitor, solicitor’s employee or other authorised litigator (as defined in the Courts and Legal Services Act 1990 who is acting for himself."
As can be seen, it allows a litigant in person (not necessarily a lawyer) to recover three kinds of costs up to a maximum of two thirds of the amount that would have been allowed if the litigant in person was legally represented. The types of costs allowed are:
The English Supreme Court Taxing Officer Guides (again based on the Lord Woolf recommendations) under the new English Civil Procedure Rules at paragraph 9.2 states that the costs that can be allowed to be recovered by a litigant in person can be divided into four categories. These are:
Obviously, costs falling within categories 1 and 2 are disbursements in nature while those falling under 3 and 4 are charges for time spent. Indeed, the notes state in those terms in paragraph 9.2 (c). Ultimately therefore, it seems the litigant in person can recover his full costs, be it disbursements or for charges for time spent resulting in pecuniary loss. This puts a litigant in person’s costs in much the same position as that of a litigant represented by a lawyer except that his costs would be reduced by two thirds from what he or she could have recovered if represented by a legal counsel.
As noted, our Rules are silent on the question of whether a litigant in person is entitled to his full costs or just his disbursements. Given that, Justice Cory referred to and adopted the relevant principles of common law and equity of England as at the time of his decision in accordance with the constitutional dictate under schedule 2.2 of the Constitution. He did not however, give any detailed consideration to the factors that must be considered under that provision and more importantly, the dictates of schedules 2.3 and 2.4 of the Constitution. These provisions in relevant parts read:
"Sch.2.2. Adoption of a common law.
(1) Subject to this Part, the principles and rules that formed, immediately before Independence Day, the principles and rules of common law and equity in England are adopted, and shall be applied and enforced, as part of the underlying law, except if, and to the extent that-
(a) they are inconsistent with a Constitutional Law or a statute; or
(b) they are inapplicable or inappropriate to the circumstances of the country from time to time; or
(c) in their application to any particular matter they are inconsistent with custom as adopted by Part 1.
(2) ...
(3) The principles and rules of common law and equity are adopted as provided by Subsections (1) and (2) notwithstanding any revision of them by any statute of England that does not apply in the country by virtue of Section Sch.2.6 (adoption of pre-Independence laws).
(4) In relation to any particular question before a court, the operation of Subsection (1)(b) shall be determined by reference, among other things, to the circumstances of the case, including the time and place of any relevant transaction, act or event."
"Sch.2.3. Development, etc., of the underlying law.
(1) If in any particular matter before a court there appears to be no rule of law that is applicable and appropriate to the circumstances of the country, it is the duty of the National Judicial System, and in particular of the Supreme Court and the National Court, to formulate an appropriate rule as part of the underlying law having regard-
(a) in particular, to the National Goals and Directive Principles and the Basic Social Obligations; and
(b) to Division III.3 (basic rights); and
(c) to analogies to be drawn from relevant statutes and custom; and
(d) to the legislation of, and to relevant decisions of the courts of, any country that in the opinion of the court has a legal system similar to that of Papua New Guinea; and
(e) to relevant decisions of courts exercising jurisdiction in or in respect of all or any part of the country at any time,
and to the circumstances of the country from time to time."
"Sch.2.4. Judicial development of the underlying law.
In all cases, it is the duty of the National Judicial System, and especially of the Supreme Court and the National Court, to ensure that, with due regard to the need for consistency, the underlying law develops as a coherent system in a manner that is appropriate to the circumstances of the country from time to time, except insofar as it would not be proper to do so by judicial act."
Schedule 2.2 is the foundation or basis for the adoption of the principles and rules of common law and equity of England applying as at the time of our country’s independence. This is subject to such principles and rules being consistent with the Constitution and any applying customary law. Further, they must be appropriate and applicable to the circumstances of our country.
Schedule 2.3 empowers both the Supreme and the National Courts to develop appropriate rules if in any particular matter before them, there appears to be no rule of law that is applicable and appropriate to the circumstances of the country, as part of the underlying law. When exercising that power, they are required to take into account the National Goals and Directive Principles, the basic rights, any relevant legislation and case from both within and outside the country. At the same time, the Constitution in schedule 2.4 requires the Courts to ensure to maintain consistencies in that process and the rules they formulate are appropriate to the circumstance of the country.
The relevant circumstances in the context of this case in our country today is that we still have a large number of our people who can not afford the expensive legal costs that are being charged by lawyers. The situation is no different from what may have been prevailing at the time of the decision in Kramer Consultants case (supra). The country’s economy has not developed in any significant and meaningful way so as to enable her citizens to afford the services of lawyers to represent their legal interests. The Public Solicitors Offices is not adequately staffed and funded to provide affordable legal services. There is also an absence of lawyers ready and willing to provide free or less expensive legal services without compromising competence, due care and attention to the case at hand. The consequence of this is the increased number of litigants in person we see in our courts. In some cases, neither of the parties are represented legally while in others only one of the parties is legally represented. In the latter case, if the party having legal representation succeeds, he or she almost readily gets an order for a recovery of his or her full legal costs, usually on a party and party costs basis unless otherwise ordered. However, as demonstrated by this case, where an unrepresented party succeeds, difficulties have been experienced in recovering costs in much the same way as a represented party would. They have only been able to recover their disbursements even contrary to clear orders for costs generally.
In my view, this is most unfair. It runs contrary in my opinion, to the call for equality of citizens in Goal number 2 of the National Goals and Directive Principles. I am obliged to take that into account where there is a lack of any relevant rule as is the case here by virtue of schedule 2.3 of the Constitution. The call for equality is, in so far as is relevant, clearly expressed in these terms:
"2. Equality and participation.
We declare our second goal to be for all citizens to have an equal opportunity to participate in, and benefit from, the development of our country.
WE ACCORDINGLY CALL FOR-
(1) an equal opportunity for every citizen to take part in the political, economic, social, religious and cultural life of the country; and
...
(4) equalisation of services in all parts of the country, and for every citizen to have equal access to legal processes and all services, governmental and otherwise, that are required for the fulfilment of his or her real needs and aspirations; and
...
(8) means to be provided to ensure that any citizen can exercise his personal creativity and enterprise in pursuit of fulfilment that is consistent with the common good, and for no citizen to be deprived of this opportunity because of the predominant position of another; and
(9) every citizen to be able to participate, either directly or through a representative, in the consideration of any matter affecting his interests or the interests of his community; and
(Underlining added)
This is a very important call in my view. Of particular relevance is the call in paragraph (4) in association with paragraphs (8) and (9). Most litigants in person are persons who are not able to afford the expensive legal costs. By reason of the failures of the past and present governments to improve the country’s economic position, most of our people have not been able to have a real and meaningful access to the countries legal processes. They have not been able too, to fully and meaningfully participate in these processes due to lack of education, skills and knowledge of the process. Notwithstanding that, some of the litigants in person have been able to succeed through their own initiatives and a will power to help themselves in the fulfilment of the next important call in Goal number 3 in National Goals and Directive Principle, self-reliance. Rather than rewarding these people for their efforts with appropriate orders for costs in their favour, the system has in fact penalised them in a way for not having engaged a lawyer by denying a recovery of their costs except for disbursements.
The present developments in the law and practice in England as reflected in the English Civil Procedure Rules 1998 is perhaps a formal recognisance of such efforts and needs even in well to do and developed economies and societies like England. In the particular circumstances of Papua New Guinea, the Supreme and National Courts are duty bound under schedule 2.3 of the Constitution to develop such rules as a considered appropriate to our country. In accordance with the powers granted to me by schedule 2.3 (1) (a) and (d) of the Constitution I consider it appropriate to formulate a rule that effectively allows a litigant in person to recover his costs and the disbursements he or she has necessarily and reasonably incurred.
The principles of common law and equity already allow for a solicitor or lawyer in person to recover his or her costs. Those principles apply to our jurisdiction under schedule 2.2 of the Constitution, which is reflected in the Kramer Consultants case (supra). I consider it now appropriate to the circumstances of Papua New Guinea that those principles should be varied. I do so by holding that an order for costs in a litigant in person case includes the litigant in person’s costs necessarily and reasonably incurred for the attainment of justice, unless the court otherwise orders. That should be the case whether or not the litigant in person is a lawyer provided there is no dual gain. This follows on from the fact that neither the Lawyers Act nor the Rules prohibit litigants in person from conducting their own cases. Of course, the court will be in a position to appreciate the level of assistance it receives from such persons and should be in a position to determine whether a litigant in person should be entitled to his costs or not. I have therefore allowed for the qualification "unless the court otherwise orders".
Then taking the taxing guides under the English Civil Procedure Rules 1998, as a framework to work from, I rule that a litigant in person should be allowed to recover the following kinds of costs unless the court of course rules otherwise:
Based on all of these, costs in my view means all expenses incurred on account of an action be it out-of-pocket expenses and or the time taken to prepare for and bring a case to its final conclusion either through a legal representative or in person.
In the present case, the applicant is a qualified and experienced lawyer. His only problem is that he has not been issued with a practicing certificate under the Lawyers Act. It was on this basis that the Registrar decided to allow only his disbursements and not his legal costs. The applicant’s action was part of or connected to a challenge against the Law Society’s decision not to issue him with a practicing certificate. There are two apparent errors with that decision. Firstly, there is no reference to the fact that Mr. Karingu is otherwise a qualified and experienced lawyer whose training, skill, knowledge and experience has been applied to successfully bring his action against the Law Society. As a consequence of this error, the Registrar overlooked the existing common law position, which already permits litigants in person who are solicitors or lawyers to recover their costs as well as their disbursements. She therefore erred in disallowing Mr. Karingus’ legal costs.
The second is that the intention and or purpose behind the provisions on legal costs under the Lawyers Act were not considered in any way. The issue raised in this error has not been the subject of any judgement as far as I am aware, and as far has counsels’ submissions go. Hence this is the first time this court is giving consideration to that issue.
The Law Society objected to Mr. Karingu getting his legal costs on the basis of section 35 of the Lawyers Act. That provision reads:
"35. Requirement to hold a practising certificate".
(1) A person shall not practise as a lawyer unless-
(a) he has signed the Roll; and
(b) he is the holder of a current restricted or unrestricted practising certificate.
(2) A person who practises as a lawyer contrary to the provisions of Subsection (1) is guilty of an offence.
Penalty: A fine not exceeding K1,000.00."
The Law Society argues and I accepted that, in order for a person to practice as a lawyer he must meet two requirements. First he or she must sign the roll of lawyers, which normally occurs upon admission to the bar as a lawyer. Secondly he or she must hold a current practicing certificate. Mr. Karingu met only the first of the two requirements but not the second. Given that, the Law Society argues that Mr. Karingu was not entitled to practice has a lawyer. In other words, the Law Society argues that, since Mr. Karingu did not hold a current practicing certificate, he was not in a position to discharge professional duties and or responsibilities of a practicing lawyer. He was thus not entitled to a bill of costs within the meaning of section 62 (2) and 63 of the Lawyers Act and as such he was not entitled to recover his legal costs.
It is settled law that all Acts of Parliament must be given their fair large and liberal meaning so as to give effect to the intent and or purpose of the Act under consideration. There are numerous authorities on this principle of statutory interpretation. See for example the Supreme Court decisions in Inakambi Singorom v. John Kalaut [1985] PNGLR 238 at page 241, per Kidu CJ; PLAR No.1 of 1980 [1980] PNGLR 326; Norah Mairi v. Alkan Tololo & Ors [1976] PNGLR 125 at page 136; and SCR No. 1 of 1978: Ombudsman Commission Investigations of Public Prosecutor [1978] PNGLR 345 at page 389, per Pritchard J.
In order to understand the meaning, intent and or purpose of the provisions of the Lawyers Act, we need to closely examine the wording in ss. 35, 62, 63 and 64. I have already set out the provisions of s.35. Sections 62, 63 and 64 stipulate as follows:
"62. Action to recover costs.
(1) A lawyer shall not bring proceedings to recover costs due to him until the end of a period of one month after a bill of the costs has been delivered in accordance with this Act".
(2) A bill shall contain the particulars required by the Rules of Court".
(3) Where there is probable cause for believing that the party chargeable with the costs is about to-
(a) leave the country; or
(b) become insolvent; or
(c) compound with his creditors; or
(d) do any other act which would tend to prevent or delay the lawyer's obtaining payment, the Court may give the lawyer leave to commence proceedings for recovery before the expiration of the period of one month referred to in Subsection (1).
(4) The bill of costs shall—
(a) be signed-
(i) by the lawyer, or, if the costs are due to a firm, by one of the members of the firm, in his own name or in the name of the firm; or
(ii) for or on behalf of the lawyer, or if the costs are due to a firm, for or on behalf of the firm, by a lawyer employed by the lawyer or by the firm, as the case may be, or be enclosed in, or accompanied by, a letter that is so signed and refers to the bill; and
(b) be delivered to the party charged personally, by sending it to him by registered post to, or by leaving it for him at, his place of business, dwelling house or last known place of abode.
(5) Where a bill is proved to have been delivered in accordance with Subsection (4), it is not necessary in the first instance for the lawyer to prove the contents of the bill and the bill shall be assumed, until the contrary is shown, to be a bona fide bill complying with this Act.
(6) The provisions of this section do not affect the operation of any Act which makes special provision for lawyers' bills of costs."
"63. Taxation on application of party chargeable or lawyer.
(1) On application at any time by a lawyer who has delivered a bill of costs as required by Section 62(4)(b), the Registrar shall order that the bill be taxed".
(2) On application by the party chargeable with a lawyer's bill made within one month of delivery of the bill, the Registrar shall order that the bill be taxed and that no action be commenced until the taxation is completed".
(3) After the period of one month provided in Subsection (2), and before the expiration of 12 months from the date of delivery of the bill under Section 62(3)(b), and where-
(a) the bill has not been paid; or
(b) judgement has not been obtained in an action for recovery of the costs covered by the bill, the Registrar may, upon such terms as he thinks fit (not being terms as to the costs of taxation) order that—
(c) the bill be taxed; and
(d) no action on the bill be commenced or that any pending action be stayed".
(4) After-
(a) the expiration of 12 months from the delivery of the bill; or
(b) payment of the bill; or
(c) judgement in an action for recovery of the costs covered by the bill,
the Court shall not make an order for taxation, except in circumstances which, in the opinion of the court, are special circumstances."
"64. Taxation by taxing officer.
The taxing officer shall tax" the bill in accordance with the Rules of Court."
There can be no argument that the Lawyers Act is about the legal profession from qualification for admission, admission of lawyers to the practice of law and to govern the conduct and business of lawyers. Section 35 makes it an offence for a person to practice has a lawyer without first meeting the two prescribed prerequisites of signing the roll of lawyers and having a current practicing certificate. The term "lawyer" is defined in section 1 of the Lawyers Act in terms of "a person who has been admitted to practice as a lawyer under this Act". However, there is no definition for the term practice. According to the Oxford Advance learners English Dictionary, the term has a number of meanings. It starts generally with "performance" or the "doing of something" and in the context of professionals like lawyers and doctors it states, "work of a doctor or a lawyer". Putting these together, it is clear to me that s. 35 is intended to prohibit a person who is not admitted as a lawyer (one who has signed the roll of lawyers) and has not been issued with a current practicing certificate to undertake the work of a lawyer.
A lawyer’s work involves primarily the provision of legal services to another or others. That can take the form of being employed by an employer on a salary or rendering such services to a client in exchange for a fee. If services are provided to a client then the way in which the lawyer can be remunerated is set out in sections 62, 63 and 64 in addition to other relevant provisions of the Lawyers Act. Hence, these provisions have relevance and application when an issue arises as to the entitlement and or the reasonableness of a lawyer’s costs from his client. They are of no relevance in the context of a lawyer employed to provide legal services to his or her employer in return for a salary. Similarly, they are of no relevance in my view, in cases where a lawyer is helping himself using his skills, training, knowledge and experiences as a lawyer. Indeed quite rightly, the Lawyers Act does not make any provisions for lawyers in this type of setting because logically they could not claim costs against themselves. It follows therefore, in my view that, the prohibition under s. 35 of the Lawyers Act is to prevent persons claiming themselves to be lawyers when in fact they are not admitted as lawyers and not issued with a current practicing certificate from holding themselves out as lawyers and act on behalf of other people or clients in exchange for a fee, whatever form that may take. The same does not apply if a person is helping himself using whatever skills he may have to draw on to bring to a conclusion a legal dispute he or she may personally have to the best of his ability.
With respect, I note in the Law Society’s arguments both before this court and before the Registrar that a bill of costs can only be rendered by a lawyer. That argument as already noted, proceeds on the basis that the reference to the phrase "bill of costs" as used in ss 62 and 63 of the Lawyers Act and the Rules under Order 22 is the same. This obviously over looks the fact that a bill of costs rendered by a lawyer to a client which is what is spoken of in ss.62 and 63 is not the same as the bill of costs under the Rules. The kind of bill of costs spoken of in the Rules is the bill that is payable under a court order in any proceeding before the court. It should again be noted that, there are no restrictions in the way suggested in the Law Society’s submission so as to authorise only lawyers to file a bill of costs. There is only one similarity. In both cases, unless the parties, that is a lawyer and his or her client under ss.62 and 63 of the Lawyers Act and a defendant and a plaintiff agree in either cases, both types of bills of costs are subject to taxation. For that purpose, the Rules require particulars to be set out in a lawyer's bill of costs and s. 62(2) and 64 of the Lawyers Act adopts the position in the Rules.
Based on the above, I would answer the third question in the negative. That is to say that a failure by a lawyer litigant in person to obtain a certificate to practice as a lawyer under the Lawyers Act, does not operated as a bar to his entitlement to an order for costs in his own action. It is within the discretion of the court to consider all the factors including the conduct of such a person in the conduct of the case, before making any order for costs. This follows on from the fact that a practicing certificate is not a condition precedent to a person’s qualification to be admitted as a lawyer. Instead admission is one of the re-requisites to a person being issued with a practicing certificate. I need not go into any deeper discussion on that other than to point out to some of the cases on it, such as In re Mellor [1974] PNGLR 312, In re Kincaid [1974] PNGLR 219, and my own judgement in Re: Godwin Haumu (unreported 06/04/01) N2094. For a detailed discussion on practising certificates see the Application of Karingu [1988-89] PNGLR 276 per Bredmeyer J with whom Amet, J (as he then was) agreed at page 296 and Los J at page 304.
As to how much a lawyer litigant in person should recover should be the subject of taxation or agreement of the parties having regard to the lawyer concern’s employment and whether or not he or she lost any remuneration on account of focusing his or her attention to the case. The same consideration should apply to a litigant in person who is not a lawyer. If in doubt of what is ordered in favour of a litigant in person or any party for that matter, the taxing officer should refer the matter back to the court for a proper ruling on it.
In summary I answer the issues raised in this case which are set out at page 3 of this judgement as follows:
Based on the foregoing I uphold the application for review of the Registrar’s decision as set out in the certificate of taxation dated the 31st of August 1999 and order as follows:
__________________________________________________________________
Lawyer for the Appellant : In person
Lawyer for the Respondent : Fiocco Posman & Kua Lawyers
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